Hinterland - 18 May 2020

This week thoughts for restarting the economy, predictions about the impact on housing, the crucial role of the Voluntary and Community sector in keeping rural places viable and the challenges to it and some very helpful tips on how to make the most of homeworking from a techy point of view in And Finally…

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Coronavirus: Slash VAT on rural tourism firms to 5%, CLA says

I applaud this idea from the CLA as a good basis on which to think about supporting the emergence of tourism activities from the virus.

Calls have been made for VAT on tourism businesses to be slashed to 5 percent in order to boost the rural economy post-Covid-19.

It comes as figures show tourism firms in the countryside will see revenues fall by up to £17.6 billion this year due to the virus outbreak.

The Country Land and Business Association (CLA) has suggested a drop in VAT from 20% down to 5% as a measure to soften the blow.

It highlighted that the UK's rate is far higher than in other countries, including France (10%), Spain (10%) and Greece (13%).

The call comes as the group, which represents 30,000 rural businesses, released a raft of new suggestions to get the rural economy moving.

CLA President Mark Bridgeman said: "When the restrictions are lifted we are encouraging everyone to book their family holiday in the beauty and safety of the British landscape.

“We hope that people are looking forward to enjoying the tranquillity and space that the rural and coastal areas have to offer and enjoy."

A reduction in VAT to levels seen in other countries would ensure that domestic tourism is competitive and affordable, he said.

And competitive pricing would significantly boost the economy and keep the UK's carbon footprint down.

The CLA's paper ‘COVID-19: Re-starting the economy in rural areas’ argues that rural areas have an advantage to social distancing thanks to lower population density, more space and less reliance on public transport.

Other proposals in the report include the tapering of furloughing schemes and other business support measures slowly to avoid a cliff edge.

UK property market could fall 13%, housing experts predict

This is a very succinct exposition of the issues in terms of the housing market. Its too soon to think about what such a fall in a rural setting might mean for affordable housing, although prospective tenants may find their position financially challenged and unable to take advantage of the knock on into the housing market.

Economists and housing experts are forecasting UK-wide price falls of up to 13%, with “brutal” declines in some areas, as the property market struggles to rebuild during the coronavirus crisis.

The range of forecasts from the major researchers is markedly wider than usual. At one end is the Centre for Economics and Business Research, which predicts that 2020 prices will be down by 13% “as a lack of transactions, high uncertainty and falling incomes take their toll”. But the estate agent Savills said the hit to the market could be more like 5%, and a third of valuation surveyors are predicting that price falls may be limited to 4% or less.

The post-lockdown market will be a buyer’s market, said Jonathan Hopper of Garrington Property Finders, as he forecast falls of 10% nationally and 15% in some areas.

“Areas with a more resilient jobs market should see values hold up better, but elsewhere the price correction could be more brutal,” he said.

The reopening of the housing market will unlock a lot of stalled transactions, said Lucian Cook, Savills’ head of residential research. But he added: “We expect newly agreed deals to take time to rebuild as buyers gradually rebuild confidence. More immediately, things like viewings and mortgage valuations will rely on homeowners being comfortable with measures put in place to protect their safety.” Savills expects short-term price falls of between 5% and 10%.

The head of the CPRE: ‘Just looking at open fields and woodland and hills makes you feel great… The countryside has a soul, and people can feel that’

I absolutely agree with this – I just wonder if building up the bucolic credentials of rural England runs the risk of boosting visitor numbers beyond what is wise or desirable. This story tells us

Rural spaces are so important. There’s the obvious stuff, which is the health angle of exercise and fresh air, and there’s the Nature cure: vitamin D, mindfulness etc. What the Covid crisis has perhaps highlighted is that Nature can be procured quite locally. It doesn’t have to be a trip to a national park! So we need to value our local public spaces. Another thing we need to look after is our Green Belt, which is constantly under threat. Our local green spaces need to be invested in, because it’s important for people to get to a space quite easily.

There’s something quite intangible about the countryside. Just looking at open fields and woodland and hills makes you feel great. It’s hard to put your finger on it, but it has a positive effect. The countryside has a soul, and people can feel that.

Coronavirus: Rural community groups threatened by crisis

And in the context of the above article, here’s the rub. Whilst this news item is from Northern Ireland, I know from my own survey work in Lincolnshire that between a third and 50% of Voluntary and Community bodies have lost their income base. We need to think seriously how we address this if we are to hang onto the infrastructure to take us positively forward into 2021. This article reveals:

One in four community groups in rural areas said the pandemic is threatening their future financial viability.

Such organisations have provided vital services in recent weeks, providing telephone support, checking on the elderly and vulnerable people and delivering food and medicines.

An umbrella body said it would have expected more of its 225 members to be under financial pressure.

It said bigger organisations are facing more problems than smaller ones.

That is because they tend to own a premises and employ full-time staff whereas the smaller organisations rely on a volunteer workforce.

The findings were in a survey for the Rural Community Network.

"Groups in rural communities have really stepped into the breach in terms of responding to need during the lockdown," said policy officer Aidan Campbell.

"The government couldn't have done it without them, but the concern has to be how long that can keep going."